Re: Apple TV and iPod touch
I have the 1TB Time Capsule, 2 Airport Extremes an Airport Express and the Apple TV. The Time Capsule is an Airport extreme with a 1TB drive that can be "shared" to all computers on the network (a network drive).
The Time Capsule, 2 Airport Extremes and the Airport Express all work (using standard Apple setup functionality) as 1 big "virtual" network. The Time capsule and Airport Extremes have 3 ethernet ports on them. I put one of them behind my home theater and connect my Apple TV, receiver and Playstation 3 to it.
I wouldn't have to connect the Apple TV to it, as t is wireless, but I hardwired it in, ecause I have the port right there.
I store Apple lossless music on the 1TB drive, connect to it through iTunes and can stream "live" to the Apple TV. What you cannot do (which is what you are refering to, Wes) is have the Apple TV store its library on the 1TB time capsule (or any other external drive).
I can stream to it or sync it to my Apple TV. When you sync it, though, it stores another copy on the Apple TV's internal storage.